Pandora Says High Royalty Rates Are Putting Them Out of Business

Web radio giant (and music recommendation service) Pandora is on the verge of shutting down due to high royalty fees, says the company's founder. Despite a million daily listeners and an iPhone application that attracts roughly 40,000 new customers a day, Pandora's founder says, "We're approaching a pull-the-plug kind of decision. This is like a last stand for webcasting." The cause of death may be a decision made last year by a federal panel that doubled the per-song performance royalty of tracks played on Internet radio stations. "I was on the bus when I get this message on my Treo," Westergren tells the Washington Post. "I thought, 'We're dead.' " Pandora stands to lose 70 percent of its $25 million revenue in royalty fees. Negotiations are underway between Webcasters and SoundExchange, a company that represents artists and record companies, to lower the fees. By comparison, traditional radio stations don't pay any royalties, while satellite radio stations face a much smaller fee. On June 26th, 2007, thousands of Internet radio stations went silent to protest the higher fees.

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Song Stories

“My President”

Young Jeezy | 2008

Young Jeezy teams up with Nas on this track, in which he compare his own success with the idea of an African-American winning the Democratic Party's nomination in the 2008 presidential election. "When I pulled up in my car, that s--- was unbelievable to people in my neighborhood because they were like, 'We grew up with him. How the hell did he accomplish this?'" he told Rolling Stone. "I feel like it was the same way with Obama. I grew up all this time, but I've never seen a black man this close to running this country."

More Song Stories entries »

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